Macroeconomic Effects of Covid-19 on Turkish Real Estate Market

Abstract

This study assesses the economic situation of the real estate market, which is the second most important sector for investment in the Republic of Turkey. The purpose of the study is to investigate macroeconomic effects on the Turkish real estate market during COVID-19. Meanwhile, entire or partial lockdowns, industrial closures, travel bans, and border closures are among the harshest policies that have nearly paralyzed production and consumption, contributing to the economic crisis during the event window. This study examines the macroeconomic effects of COVID-19 on the Turkish Real Estate Market. These macroeconomic variables include the house interest rate and aggregate exports on real estate house sales. This study employs a monthly dataset that extends from January 2018 to September 2021. The data were divided into two models before and during COVID-19. The regression assessment will be done using a multiple linear regression model (MLR). According to the findings, exports are positively associated with home sales in both models. On the other hand, interest is negatively related to house sales. The positive effect of exports is decreasing in the model that includes the COVID-19 period. Likewise, the negative effect of real interest rates increased in the COVID-19 period. Therefore, both hypotheses were accepted.